Diageo: SG upgrades to buy; stock has speculative interest.
(CercleFinance.com) - Société Générale (SG) has upgraded its rating on the Diageo share from hold to buy.
Sales momentum is improving and despite its size, the British spirits giant may have a speculative dimension. In particular, SG has raised its 12-month target price from 2,165 pence to 2,763 pence.
Admittedly, the group's US sales are still suffering from Smirnoff (vodka) and Captain Morgan (rum), "but now the company is far more focused on its premium portfolio," SG says.
Its analysts highlight Crown Royal, a Canadian whiskey, which is now Diageo's best-selling product in the US, in addition to the dynamics of Ciroc (vodka) and Johnnie Walker (whiskey). In addition, SG adds that Diageo is gaining market share in Europe and India, low value added brands that are franchised.
According to the research report, this is not all, with the failed Kraft Heinz/Unilever merger suggesting that Diageo is a potential prospect. In this context, Diageo's huge market capitalisation (58.5 billion pounds sterling) does not seem to be an obstacle to a merger - especially as it is 100% free float.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Sales momentum is improving and despite its size, the British spirits giant may have a speculative dimension. In particular, SG has raised its 12-month target price from 2,165 pence to 2,763 pence.
Admittedly, the group's US sales are still suffering from Smirnoff (vodka) and Captain Morgan (rum), "but now the company is far more focused on its premium portfolio," SG says.
Its analysts highlight Crown Royal, a Canadian whiskey, which is now Diageo's best-selling product in the US, in addition to the dynamics of Ciroc (vodka) and Johnnie Walker (whiskey). In addition, SG adds that Diageo is gaining market share in Europe and India, low value added brands that are franchised.
According to the research report, this is not all, with the failed Kraft Heinz/Unilever merger suggesting that Diageo is a potential prospect. In this context, Diageo's huge market capitalisation (58.5 billion pounds sterling) does not seem to be an obstacle to a merger - especially as it is 100% free float.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.